Twelve Lessons from 25 Years

In 1989 we started our small consulting business on Aki Kalliatakis’ dining room table. That time has passed very quickly, but what really delights us is to see how far some businesses have come in terms of looking after their customers. Nando’s was one of our first clients, with a total of six stores in 1991, and today they have exceeded 2000 stores in many countries.

There is still a long way to go, however, and there are the key learnings that we have had that we’d like to share with you.

“Customer service” is not enough anymore. I get good, even great service just about everywhere that I spend my money. Today it’s not even only about sustainable customer loyalty, (which comes from managing the moments of truth, and also from continuously and innovatively adding value for customers.) The “maverick” companies like Virgin Atlantic, Discovery, Apple, Outsurance,, Mr. Delivery, Avis Car Rental, Nando’s, Hollard Insurance, and Capitec are growing successfully, and it’s mostly because they continuously find new ways to add value for customers. Instead of trying to trap customers, to make them hostages, to make it difficult or impossible to switch to a competitor, it’s a better idea to spend your time and money to give them irresistible experiences and a quantum leap in value. But you need to go one step further, and that is to implement actions to manage your customers better. While customer loyalty leads to customer retention, you also need to find ways to grow the value of your customers to your business, (mainly through cross-sales and up-sales,) to be proactive in using the power of recommendation and referrals, and to also find ways of reducing the cost to serve your customers without upsetting them.

Stick with the basics: It’s the simple things that count the most. Yes, every management consultant since Tom Peters has been saying this, but there are no magic wands. Every time we discover something “new” about the “secrets” of well-run companies, we are disappointed – because there aren’t any! But there is an obsession with getting the basic, small, detailed things right: Look after your customers like they were your friends, make sure you never run out of stock, speed up the queues and payment, train staff often and much, respond to customers’ needs – however weird they are- with enthusiasm, and constantly find ways to make it easy to do business with your company – physically, intellectually, emotionally and in terms of time effort needed.. You can start off by making a list of the “dumb” things that you do that irritate your customers, and find as many ways as you can to make it easier to do business with your company. (Reduce your Customer Effort Score.)

It’s all about your people. Study after study shows that motivated and empowered people look after their customers. Forget about expensive CRM software and the other costly customer care technology available today: if your people are angry and frustrated with their managers, and feel abused and disrespected by the company, they will take it out on the safest target – the customer. You cannot neglect your people, and there are hundreds of things that you can do to motivate and inspire them. If you want a good attitude, look in the mirror first, and do whatever it takes to inspire your team. Start off by having some fun and work from there. While you are at it, also have fun with your customers too. (And by the way, the more you encourage them to be fussy about the service that they get, the more likely it will be that they give good service.)

Say “Thank-you” and be nice to customers, in a meaningful manner. This is rare in most large businesses today. You may spend a ton of money financing your new car with your bank – and receive a standard computer-generated letter with your name spelt wrong. This is the same bank where you have three home loans totalling millions, and the only paperwork you can find from them is statements, legal documents and an insurance policy. And it is the same bank where you have been a customer since you was eight-years-old. Nobody vaguely more senior than a bank-teller has ever said thank-you, and when occasionally you get a telephone from someone else, it is either to warn you that you have exceeded the overdraft limit, or that they want to sell you something. Not good enough! We really believe that loyalty begins with showing genuine warmth and care and courtesy to people, and understanding their history with your firm..

Companies are generally awful at keeping and using meaningful information about customers. Our local supermarket has no idea that we spend on average about R7000 per month there, and have been doing so for twenty-nine years. Cell phone providers send us all the same computer-generated Valentine’s Day text message addressed to “Dear Valued Subscriber,” and wonder why we are ungrateful. SAA, an airline that our managing partner Aki Kalliatakis used to travel with regularly, (completing approximately 1200 economy-class flights in the past twenty-five years,) still doesn’t know how to pronounce his name, nor do they know how he hates fish, nor do they offer him the same aisle seat that he always requests, (even though he has asked hundreds of times.) Of course, they assume that he will be over the moon when he gets one free flight to Durban on the frequent flyer programme, but he knows that this is only possible after flying there and back 28 times to earn his free flight. You have to be there and notice things about them.

Why do we find it so difficult to say “sorry” and fix problems that we have generated? The poorest customer service skill in companies today is recovery from complaints and poor service. Is it because senior managers have too much testosterone, (even the women)? Is it that we fear we will lose face by apologising? Perhaps it’s because we think that it will cost too much, or that if we ignore unhappy customers, they will forget about it. (They don’t.) A genuine apology, correctly timed, can work wonders, and may turn an unhappy customer into an incredibly loyal customer. If you fix the problem as well, then you may have a customer for life. You may lose money on this deal, but you have invested in your future.

Customers are very willing to talk about their experiences… if asked. Why is it that companies spend a fortune to pay other companies, (market research firms,) to find out about their customers when they should be doing this themselves? Any decent business knows instinctively what customers’ needs, wants, desires and expectations are, and constantly talks to customers about these. (And you may as well forget about customer satisfaction surveys. They measure customers’ perceptions of how they feel about your business, but are not a true indicator of loyalty. Your business probably has a whole bunch of unhappy customers that are trapped like hostages, and also an even bigger group of customers who express satisfaction, even delight, but who act like mercenaries. They want the best possible deal – no matter who they deal with. It is much better to measure loyalty, (like repeat business, propensity to defect, openness to cross sales, willingness to recommend, and lack of price sensitivity,) if you want to get a true picture of your success. It is only when the executives get knee-to-knee and jaw-to-jaw with customers, (especially lost customers,) that the most important information is shared. And if those customers have got a few beers in their bellies, they will probably be more honest too!

Today, customers make the rules. Rules, systems, policies, and procedures are all usually created to benefit the company, to protect the business, rather than to delight customers. And most customers think that they are trivial, irrelevant, irritating and even pathetic. You need to challenge everything, and if this particular issue is crucial to your business, then ask yourself, “How can we best protect our customers from this thing?” In a world which is vastly connected through social media and even the simple, humble email, customers can and have shared their stories with millions of other people all over the world. Can your business afford that because someone was having a “bad hair day”? As author Chris Anderson puts it: “… a company’s brand is not what the company says it is, but what Google says it is. The new taskmasters are us. Word of mouth is now a public conversation, carried on in blog comments and customer reviews, exhaustively collated and measured. The ants have megaphones now.

You can get away with murder by being nice to people. Customers tend to be very forgiving when you have built a positive balance in their “Emotional Bank Account.” (With thanks to Stephen Covey.) But it goes much deeper than that: when you treat customers with dignity, friendliness, helpfulness and respect, they feel a sense of obligation to support you, and to protect you. They are the ones who go the extra mile for you, not the other way round.

Customers love choices. One of the most powerful ways to get customer commitment is to empower them, and one way in which this comes is through customisation, personalisation, and/or choice. Having a sit-down meal is fine, but a buffet let’s you choose what you want. Self-service – in whatever customer environment you care to mention – can be a powerful way to get enthusiastic participation, to save your business from the hassle of serving each customer individually, and to give customers a sense of “ownership.” When they feel like partners, they act like partners, and this can only benefit your firm.

Look out the window at who is better than you. I don’t believe that companies should be so focused on competitors that they forget to put energy into their customers. But you should always be asking which companies both inside and outside of your industry are doing better than you. What lessons can you learn from them? What can you copy, and be the first in your industry to do? What can you apply that will make your company unique and distinct in your industry?

None of this happens by itself. We have lost count of how many times we have been asked to come in and “do some training for our staff.” These sessions are like one-night stands. They are very pleasurable in the short term, but never lead to anything meaningful. You have to have a plan, and measure and reward the behaviours that you desire, and constantly reinforce the messages, or it will all die.

(While you are here, why not take a brief test to check if your company is customer driven. Click on the tab “Test Your Company” at the top of this page, and send us your answers. We’ll do the rest, and give you an idea of your strengths and limitations.)

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